Childhood friends Trevor Jones and Travis Lubinsky started a unique watch business in Los Angeles in 2010. The concept consisted of donating 10 percent of their profits to 10 different charities from the sale of 10 different colors of watches. Despite entering a crowded and competitive watch industry, Flex Watches generated over $1 million in sales by their third year in business, which also meant their charities were seeing significant donations to help their causes.
Their second iteration of the Flex Watch included interchangeable watch faces, which allowed for upsell but diverted from the original charity element. Sales plummeted and revenue was in a free fall. The two owners looked to Marcus Lemonis and The Profit to see they if their watch business was flexible enough for a rebound.
Marcus had been looking for accessories to expand his successful fashion brands. The biggest draw for him to Flex Watches was the charitable element, which he saw as a way to make a profit and a real difference in peoples’ lives.
Flex Watches on The Profit
The Profit Season 4 Episode 4
The offices at Flex Watches were small but nicely decorated. Marcus tried on one of the new watches where the watch face pops out. He thought it felt comfortable and durable, and at a $35, had a workable price point.
Marcus told Travis and Trevor that the main draw for him was the charity element to their business. Travis said the swappable watch face version was in its first generation and Flex Watches had recently introduced a sports watch that sold for $100. Marcus told them that today’s watch consumer is looking for an inexpensive watch, especially in an age where everyone has a clock on their phones. Travis explained that the retail stores they had dealt with told them they could not move watches that sold for under $100, feeling they were not getting enough of a profit margin by buying the watches from them at $15 and selling them for $35 a piece. The guys accommodated the store but ended up losing the deal. The new generations of the Flex Watches were not selling. Profits were slipping away.
Travis showed Marcus their third generation of Flex Watches, which was available in stainless steel, gunmetal, gold plate, and rose gold, and retailed for $65. Marcus did not understand why they had abandoned the charity angle to their business. When they explained that their customers did not even realize that there was still a charity element to the business, Marcus cringed.
Trevor and Travis each owned 41% of Flex Watches and had a third investor. Trevor handled the design and marketing of Flex Watches while Travis was in charge of materials and manufacturing. The guys did everything they could do to keep costs down and Marcus told them it showed in the quality of the product.
By the end of the fourth quarter of the previous year, they made only $300,000 and lost $75,000 after reaching nearly $2 million in sales at one point. Trevor and Travis had been funding their losses through credit cards and reverse mortgages. Marcus knew what the problem was. Flex Watches had diverted from its original mission of supporting a variety of charities. Any deal Marcus would make must include a return to the multi-colored charity watches that drew him there in the first place.
As the two gave Marcus a tour of their warehouse, Trevor said that he had simply walked in the warehouse, liked what he saw and made an offer on the spot. A similar scenario played out with the Flex Watches packaging. They chose a design at random to save time and money. Marcus said they needed to perform some due diligence when making these big decisions that will affect their company. The packaging of the product was at least as important as the product itself when it came to customers purchasing decisions in a retail environment. They were not doing much to distinguish themselves from the competition.
Marcus told Trevor and Travis that had he known they had given up the charity aspect of Flex Watches, he would not have agreed to come see them. Trevor explained that the original branding of Flex Watches reminded him too much of his mother, who had passed away.
Trevor told Marcus he felt that Flex Watches was worth a $2 million valuation, which Marcus felt was way off for a company that had experienced such a dramatic drop in sales. He offered them $400,000 in exchange for 40% of their business. He explained the investment capital would go toward paying off debt and providing cash flow, with an increased focus on branding through social media outlets. That would leave each of the friends with just a 21% stake in their business. And, as always, Marcus would assume total control over the business. Though Travis did not agree with Marcus’ valuation of the company, they decided to take the deal and relinquish control.
Marcus met with the employees to explain that Flex Watches was going back to the original watch version and charity aspect of the business. Trevor, Travis, and Marcus then met with Sheik Shoes, the store that had asked them to increase their price point. Marcus explained that with an investment of $300 in a freestanding retail display, they watches would sell themselves and they would walk away with a net profit of $500 for each display set up in their stores.
The Profit host tasked the two old friends with the job of creating a vision board for Flex Watches. It was a struggle and they fought to come up with a cohesive concept and vision. Marcus insisted that they needed to get back to being a brand that made a real difference in the world. A new website that told and sold the story of the charities they helped was essential to their rebranding efforts.
Marcus helped Trevor and Travis realize the importance of imparting their vision and the guys made a successful pitch to Flip Flop Shop through the telling of their story. The retailer was not interested in selling watches but was sold on the charity aspect of their business.
Flex Watches After The Profit
Flex Watches new website went live and made a significant impact on sales of the original watch designs. Charity watches now sell for $40 and are available in a wide range of colors and styles on their website and on Amazon. Proceeds continue to help such causes as:
- Autism
- Clean water
- Animal rescue
- Environmental issues
- Hunger
- Military
- Arts
- Anti-bullying campaigns
- Alzheimer’s disease research
Flex Watches are also available in mini watches, smartwatches, and Star Wars and Minions promotional styles. The success of Flex Watches has led to partnerships with celebrities like Shark Tank’s Daymond John and rapper Tyga. In 2017, Trevor and Travis donated 100% of their profits over Labor Day weekend to the victims of Hurricane Harvey in Texas and Louisiana.
Flex Watches joined Marcus’ fashion empire, the ML Creative Group, and partnered with Inkkas, another investment that began on The Profit.
Disclaimer: The information provided in this article is strictly informational; SEO Insights is not affiliated with Flex Watches, The Profit, or any of its subsidiaries.
